![]() ![]() The basic format of a Profit and Loss Statement is simply: Revenue - Expenses = Profit This is all the information that we need to produce for our Profit and Loss Statement. To check our Profit and Loss, we’re going to have the figures from two of these sections – Revenue and Expenses. Take another look: TRIAL BALANCE FOR (NAME)’S BAKERY AS AT (TODAY’S DATE) On our Trial Balance, we have six sections – Assets, Liabilities, Expenses, Revenue, Drawings and Owner’s Equity. ![]() It also summarises our revenue and expenses for the year, which is important for analyzing how money has come in and out of our business. This is also important to various other parties – the bank would like to know we made a profit so they can be sure we can continue to repay their loan, and the government would like to know the size of our profit To calculate our tax. Usually, it is one year.Ī Profit and Loss Statement is important because it illustrates whether or not we have made a profit – one of the most important objectives of being in business. A Profit and Loss Statement illustrates how much profit you made in any given period. ![]()
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